Virus Relief Bill Held Up by GOP Bid to Limit Fed's Lending Power

 A Republican push to curtail the Federal Reserve's emergency lending powers kept congressional leaders from completing a $900 billion coronavirus relief package for a second day Saturday, with the parties digging in over the late-emerging dispute.

Congressional leaders agreed to the contours of the sweeping relief package earlier this week. They have maintained for days that they were close to finalizing its details, if the rift over the Fed provision from Sen. Pat Toomey (R., Pa.) can be resolved.

"Sen. Toomey's legislation is the only significant hurdle to completing an agreement," Senate Minority Leader Chuck Schumer (D., N.Y.) said on the Senate floor Saturday. "It's about tying the hands of the next Treasury secretary and the next Fed chairman in a true emergency."

The relief package under discussion is expected to include $300 a week in enhanced unemployment benefits, a second round of stimulus checks and funding for schools, health-care providers, vaccine distribution and small businesses. Negotiations accelerated this week after congressional leaders agreed to drop two provisions: funding for hard-hit state and local governments, which Democrats and some Republicans had sought, as well as liability protections for businesses and other entities operating during the pandemic, a top GOP priority.

Congressional leaders expect to bundle the coronavirus aid package with a full-year spending bill needed to keep the government running after its current funding expires at 12:01 a.m. Monday.

House Speaker Nancy Pelosi (D., Calif.) told House Democrats on a conference call Saturday that "we're right within reach" on an agreement, though the disagreement on emergency lending powers persisted.

Senate Majority Leader Mitch McConnell (R., Ky) told Senate Republicans on a call Saturday afternoon that he would back Mr. Toomey's position, according to someone familiar with the discussion.

Mr. Toomey has pushed to insert a measure that would restrict the Federal Reserve's ability to establish the types of emergency lending programs that it authorized in March to curb an emerging financial panic. That step would go beyond an earlier proposal to revoke $429 billion provided to the Treasury to backstop losses in the Fed lending programs.

Treasury Secretary Steven Mnuchin last month declined to allow the programs to continue after Dec. 31, saying he didn't think it was legally allowed. A nonpartisan congressional research arm disputed that interpretation on Thursday.

In March, the Federal Reserve announced lending programs to keep credit flowing to large companies and cities and states. Days later, Congress provided $454 billion for the Treasury to cover losses in Fed lending programs. Credit markets rebounded strongly and the Fed ultimately purchased fewer than $30 billion in loans and other assets.

Mr. Toomey has insisted that the Fed be prevented from reviving those programs without explicit congressional approval. His proposal would bar the Fed and Treasury from independently establishing any program that sought to purchase debts of businesses, cities or states, as the Fed has done this year.

"They have achieved their purpose. They should come to an end, they should not be restarted and a replica should not be created. That's all, " Mr. Toomey said on the Senate floor Saturday.

Mr. Toomey met with Mr. Schumer on Saturday afternoon. "I think we should be able to get a deal done," he said as he left Mr. Schumer's office.

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